Workers Compensation - Proceedings to obtain compensation - Determination of claims - Procedure before hearing - Service of bill of costs - Construction of personal service provisions - Delivery of draft costs order to solicitor not formal service - Evidence of waiver/estoppel must be compelling.

Rae v Calor Gas Ltd [1995] SLT 244; Rosefarms Pty Limited v Stourhead Pty Limited [2000] ACTSC 3; R v Heron; ex p Mulder (1884) 10 VLR 314; Davies v Alliance Acceptance Co (1993) 110 FLR 153; Pivot Ltd against Crawford; Re [1999] TASSC 67; Ditford v Temby [1990] FCA 347; (1990) 97 ALR 409, considered.

Workers Rehabilitation and Compensation Act 1988 (Tas), s159.

Workers Rehabilitation and Compensation Regulations 2001 (Tas), regs13, 14.

Workers Compensation - Proceedings to obtain compensation - Determination of claims - Appeals and stated cases - Question of law - What constitutes

Hanlon v McKay Investments Pty Ltd [2001] TASSC 37; (2001) 10 Tas R 247; Cascade Brewery Pty Ltd v Chambers 76/1992; FAI Insurance v Morrison 79/1993, considered.

Workers Rehabilitation and Compensation Act 1988 (Tas), s63

Workers Rehabilitation and Compensation Regulations 2001 (Tas), reg13.

Judgment Number: [2004] TASSC 15

1 The appeal concerns the right of the State of Tasmania to have its costs order assessed by statute, rather than through the process of taxation. The bill of costs as drawn by an officer of the State amounts to the sum of $46,813.19.

2 On 27 August 2002, the Workers Rehabilitation and Compensation Tribunal ("the Tribunal") dismissed a reference brought by the respondent pursuant to the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s42 in respect of an injury occurring on or about "August 1992 and/or 14 May 1996". The Tribunal ordered that the respondent pay the appellant's costs of the reference.

3 On 20 May 2003, some eight months later, the appellant's solicitor wrote to the respondent's solicitor advising the amount of costs claimed and asking whether they could be agreed. On the same day, absent agreement, after a telephone conversation, she forwarded a copy of the draft bill by mail "by way of service".

4 On 22 May, the respondent replied, requesting a copy of the draft bill and stating that on its receipt, she would obtain instructions.

5 On 13 June 2003, the appellant's solicitor wrote to the Tribunal, stating:

"On 27 September 2002 it was ordered that the worker pay the employer's costs of this reference.

A Bill of Costs was served on the worker's solicitors by letter dated 20 May 2003. As we have not received a notice of objection, I request that this reference be re-listed before Commissioner Chandler for the purposes of seeking an order as to the quantum of costs to be paid."

6 At the hearing conducted on 11 and 17 July, the appellant contended that the combined effect of the Act and the Workers Rehabilitation and Compensation Regulations 2001 ("the Regulations") precluded any objection to, or examination of, the bill of costs as drawn. The respondent had only stated objection to identified items in the bill by letter to the appellant dated 18 July 2003. The Tribunal determined that the respondent had not been served with the bill of costs in accordance with the requirements of the Regulations and accordingly could not be taken to have admitted each item in the bill. Accordingly, the Tribunal adjourned the matter sine die.

7 The appellant seeks review of the order adjourning the hearing sine die. Given the lapse of time between the costs order, the letter of demand of 20 May, and the alacrity of the referral to the Tribunal, the decision to appeal, rather than effect service on the respondent personally, does the State a disservice.

"1 The learned Commissioner erred in law in determining that the Appellant had not effected service of its bill of costs upon the Respondent by any of the means provided for in S159(1)(a) of the Workers Rehabilitation and Compensation Act 1988 when no reasonable Tribunal, properly instructed as to the law, could so determine.

2 The learned Commissioner erred in law in determining that service of the bill of costs on the Respondent's solicitor did not constitute service of it upon the Respondent, when no reasonable Tribunal, properly instructed as to the law, could so determine."

9 The Tribunal ruled that amendments to the Act and Regulations made subsequent to the date of the "injury" applied to the questions of costs and service, as of the date of the hearing. It also determined that those questions were procedural and not subject to any doctrine against retrospectivity. Neither party takes issue with these determinations. It correctly held that the relevant statutory and regulatory provisions were the Act, s159, and the Regulations, regs13 and 14.

10 The respondent contends that the finding as to service was one of fact and that no question of law arises thereby precluding appeal (the Act, s63). The real question raised by this appeal is whether the bill of costs as drawn is, by virtue of reg14, deemed to be agreed. The precondition to the operation of that regulation is that of proper service which, in turn, requires interpretation of reg13. That question is one of mixed fact and law. In this case, the Tribunal determined that:

"... receipt of the bill by the worker's solicitor does not equate with its receipt by the worker. ..."

"Absent its service the worker cannot, in my opinion, be taken to have admitted each item of the employer's bill of costs by operation of r14(1)."

11 The error claimed is that the evidence of service, by post on the respondent's solicitor, constituted service on the worker and complied with the requirements of reg13. As such, it raises a question of law (Hanlon v McKay Investments Pty Ltd [2001] TASSC 37; (2001) 10 Tas R 247; Cascade Brewery Pty Ltd v Chambers 76/1992; FAI Insurance v Morrison 79/1993).

"13 - (1) If costs are not agreed between the parties, the successful party to whom costs have been awarded by an order of the Tribunal may serve a bill of costs on any other unsuccessful party.

(2) Unless the Tribunal otherwise orders, the fees in a bill of costs are to be at the rate of 85% of the fees set out in Part 1 of Schedule 1 to the Supreme Court Rules 2000.

14 - (1) An unsuccessful party is taken to admit each item on a bill of costs unless that party delivers to the Registrar and to the successful party a notice of objection within 14 days after the date of service of the bill of costs.

(a) specify the items objected to on the bill of costs; and

(b) specify detailed reasons for each objection; and

13 Costs were not agreed. It is arguable that the respondent's solicitor, absent instructions, did not, in any event, have authority to agree them. (See generally Richmond v Branson & Son [1914] 1 Ch 96; London & Blackwell Railway Company v Cross [1886] 31 Ch D 354; Porter v Fraser [1912] 19 TLR 91.) The claim of the respondent had been determined some nine months previous and, on the material before this Court, it is not possible to ascertain whether the retainer of the solicitor had continued, or whether solicitor and client had maintained contact. The solicitor had certainly held herself out as still acting for the respondent (Waugh v H B Clifford & Sons [1982] Ch 37). Her letter of 22 May, requesting a copy of the bill of costs, was accompanied by the indication that upon receipt of the bill, she would seek instructions from her client.

14 The Act, s159, relevantly provides in relation to service:

"159 (1) Where under this Act a notice or other document, other than a notice of injury or claim for compensation referred to in Part IV, is required or authorized to be served on a person, the notice or document may be served

(a) in the case of a person who is neither a body corporate nor a firm

(ii) by leaving it at that person's place of residence last known to the person required or authorized to serve the notice or other document with someone who apparently resides there, or at that person's place of business or employment last known to the person required or authorized to serve the notice or other document with someone who is apparently employed there, being in either case a person who has or apparently has attained the age of 16 years; or

(iii) by sending it by post to that person's place of residence, business, or employment last known to the person required or authorized to serve the notice or other document;

(3) The provisions of this section are in addition to the provisions of sections 109X and 601CX of the Corporations Act."

15 The Corporations Act 2001, ss109X and 601CX, do not assist in the determination of this appeal. Service on a solicitor is not explicitly referred to as it is in the Supreme Court Rules 2000. The Regulations are silent as to the form of service, although they do provide a regime for discovery and inspection (regs6 - 8). Doubtless, as a matter of practice, service of documents or proofs of evidence as required (regs 9 and 11), is commonly effected by delivery to the respective solicitors. The appellant contends that such practice, by agreement, entitles it to rely on acceptance by the respondent's solicitor of the bill of costs and that the terms of the Act, s159, are permissive, rather than mandatory.

16 Statutes which require personal service have been strictly construed and the traditional requirement that the:

"... method of service which can be effected only in the case of an individual, and then only by placing the writ into the hands of the defender or arrestee personally" (Rae v Calor Gas Ltd [1995] SLT 244 at 247)

accepted (Rosefarms Pty Limited v Stourhead Pty Limited [2000] ACTSC 3; R v Heron; ex p Mulder (1884) 10 VLR 314; Davies v Alliance Acceptance Co (1993) 110 FLR 153). In cases involving status or financial interest, a mere "coming to notice" has been regarded as insufficient to comply with the requirement of personal service (Re Florance; Ex parte Turimeita Properties Pty Ltd (1979) FLR 256; Re John T Martin & Co; Ex parte Australian Continental Resources Ltd (1971) 18 FLR 450; Re Long; Ex p Fraser Confirming Pty Ltd (1975) 24 FLR 392; Re Fairlie; Ex parte Armco Australia Pty Ltd (1969) 14 FLR 65). However, in cases where service has been effected on another but proof is provided that at some subsequent time the legal document came into the possession of the party, the service has been held to have been validly made (Deputy Commissioner of Taxation v Barroleg Pty Ltd (1997) 25 ASCR 167; Pino v Prosser [1967] VicRp 107; [1967] VR 835) but it is the date of actual receipt which governs any requisite statutory period (Pino (supra), Rogerson v Tchia (1995) 123 FLR 126), an approach adopted by Crawford J in Pivot Ltd against Crawford; Re [1999] TASSC 67, a case involving the provisions of the Act, ss159 and 35(1)(b). Here there was no proof of receipt by the respondent and no compliance with the statutory requirement. Regulation 13 adds nothing to the requirement, stating only that service is to be effected "on any other unsuccessful party".

17 The appellant contends that service was effected by delivery to a solicitor authorised by the party, either through agreement or by the application of the doctrine of waiver or estoppel. It maintains that the use of the word "may" in the Act, s159, and the provisions of the Acts Interpretation Act 1931, s29AB, permit alternate methods of service. However, to succeed the appellant must show more than the provisions of the Act, s159, are simply facultative (Howship Holdings Pty Ltd v Leslie [1996] NSWSC 314; (1996) 41 NSWLR 542). Further, it cannot simply rely on the legal propositions equating knowledge on the part of a solicitor with that of the client (see generally, G E Dal Pont, Law of Agency, 1 Ed, 1.35, 2.43). While a solicitor retained to defend proceedings is authorised to accept service and, in doing so, founds the jurisdiction of the relevant court or tribunal (SCF Finance v Masri (No 3) [1987] 1 All ER 199), reg13 envisages a two-part process, namely attempted agreement followed by formal service. Attempted agreement requires advice of the amount and, in most cases, supply of details of composition. Here the initial supply of the draft bill could be seen as coming within the first part of the process. To that extent, the question can be regarded as one of fact. The Tribunal was entitled to conclude that there had been no service on the worker as required by the Act, s159, and that acceptance of the draft bill was no more than a preliminary step to see if the claim could be agreed.

18 The appellant contends that acceptance by the solicitor constitutes waiver of any right to rely on the statutory requirement. In Howard v National Bank of New Zealand Ltd [2002] FCA 1257; (2002) 194 ALR 688, Drummond J was required to consider the validity of service on New Zealand solicitors who had unequivocally accepted service of the Australian process. However, there were concurrent proceedings on foot in New Zealand and the question of forum required consideration as to whether that manner of service afforded the Australian Federal Court jurisdiction. In determining that question, Drummond J was not required to consider any subsidiary issues as to authority or form of waiver on the part of the respondents. In Ditford v Temby [1990] FCA 347; (1990) 97 ALR 409, Beaumont J, having determined the issue of personal service of a summons to produce documents, added, at 417:

"Alternatively in my view, the respondent would now be estopped from denying that the service was valid: see Commonwealth v Verwayen (1990) 95 ALR 321 per Mason CJ at 330 and following; per Brennan J at 344 and following; per Deane J at 346 and following; per Dawson J at 361 and following; per McHugh J at 396 and following.

A further alternative view, if it were necessary, would be that it should be held that, by his conduct, the respondent waived his right under the rules to personal service: see Verwayen's case per Mason CJ at 328 and following; per Brennan J at 339 and following; per Toohey J at 372 and following; per Gaudron J at 382 and following; per McHugh J at 389 and following."

19 Accepting, without deciding, that a party can be precluded by waiver and/or estoppel from relying upon a statutory requirement governing service, it remains necessary for a party to clearly show that the facts support a finding of wavier. Analysis of the exchange between the respective solicitors does not warrant such a finding. The respondent's solicitor was undoubtedly incautious and had not turned her mind to the relevant Regulations. However, the form of the exchanges does not establish waiver.

20 The solicitor for the appellant spoke to and wrote to the respondent's solicitor on 20 May 2003, some eight months after the dismissal of the respondent's claim. The amount of the bill of costs as drawn totalled $46,812.88. The amount, but not the details, were communicated and agreement sought. The first letter stated:

"I refer to the order awarding costs in favour of the State with respect to your client's S42 reference.

Our costs are $25,078.69 plus $21,734.19 in disbursements. Can costs be agreed? Please let me know within 5 days, failing which a bill of costs will be served on you."

It is inconceivable that any solicitor would agree such an amount without examination of the components. The second letter of 20 May stated:

"I refer to our telephone discussion of today's date whereby it was indicated by you that there was a dispute regarding costs. I therefore enclose by way of service a copy of the employer's bill of costs in this matter."

The affidavit of Ms Perring, the appellant's solicitor, sworn on 9 July 2003, which relevantly states:

"(2) On 20 May 2003 the worker's solicitor contacted me by telephone indicating that costs were not agreed, whereupon I indicated that I would forward a copy of the bill of costs."

adds nothing to the evidentiary foundation for the claim of waiver. Rather, it suggests a unilateral assumption of a right of service on the opposing solicitor. On 22 May, the respondent's solicitor wrote in the following terms:

"I refer to your correspondence of the 20th May 2003 and my conversation with Ms Perring on the 20th May 2003.

Could you please forward your bill of costs for taxation.

21 The letter can be seen to be no more than a request for the itemised account upon which instructions could be sought as to whether all or part could be agreed. Insofar as the language of the letter permits a different interpretation, for there to be waiver, the statement or conduct must be clear, if not unequivocal. Given the amount involved, the statutory requirement of personal service, and the import of reg14, evidence of waiver must be compelling. The evidence does not substantiate a finding of waiver. Regulation 13 states:

"13 - (1) If costs are not agreed between the parties, the successful party to whom costs have been awarded by an order of the Tribunal may serve a bill of costs on any other unsuccessful party.

(2) Unless the Tribunal otherwise orders, the fees in a bill of costs are to be at the rate of 85% of the fees set out in Part 1 of Schedule 1 to the Supreme Court Rules 2000."

22 The action of the respondent's solicitor was directed to the possibility of agreement. Until she had taken issue with the components, the question of "agreed costs" had not been answered. At that stage it was incumbent on the appellant to formally serve the "bill of costs on [the] unsuccessful party". It is at that stage that if the respondent's solicitor had agreed to the form of service that any question of waiver might arise.

23 The Tribunal was correct in its conclusion and its decision to adjourn the reference. It did not preclude the appellant from having its bill of costs taxed. Neither did it dismiss the reference. It did not preclude a future hearing for assessment, but simply required service as a precondition.

24 The conduct of the appellant through its solicitor, both in its claim of waiver to the possible detriment to one of its citizens, and its pursuit by way of appeal, does itself a disservice.